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Lord McIntosh of Haringey moved Amendment No. 88:

Page 6, line 22, at end insert ("and
(c) having regard to the nature of the employment or of the employer, all reasonable steps were taken before the employment began to establish that the employment of the employee would not constitute an offence under this section.").

The noble Lord said: This has to be a probing amendment because it is difficult to find the right words to provide what we seek: to persuade the Government that there has to be a degree of flexibility in the clause for small employers and short-term employment. I do not claim for a moment that we have the right phrasing by using the words,

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The Government will know from the results of their consultation that the concern expressed about the clause has not been from large, well-established employers. On the whole they have reasonably formal recruitment procedures. They would expect to examine some document in any case and would have no difficulty with the implementation of the clause.

The problem is as regards small employers. I do not even know the right definition of a small employer. Does it apply to an employer with 10 or 20 employees? I do not know. I have spent 30 years of my life as an employer, starting with only one employee and ending up after 30 years--the Committee might not consider it a great success--with something like 40 employees. Nevertheless, I have been through all the stages of employment of small numbers as an employer. When I first started as an employer in the 1960s formalities now imposed on employers--I had to suffer them in the early 1990s--would have driven me crazy. I have got used to them after a number of years, but I do not know whether at the beginning I could have survived the degree of regulation imposed on small businesses in the 1980s and 1990s.

I do not ask the Government to accept the wording of the amendment but to understand the purpose underlying it. Let us take an extreme case. A self-employed person may wish to employ another person for a short period for a certain purpose. That is exactly the kind of job creation of which the Government claim to be in favour in all their propaganda. However, this provision will be an obstacle to such short-term, part-time or casual employment. From the point of view of someone's career, it may not be ideal employment. But it is an addition to employment. Under the clause as drafted, small employers and employers of short-term labour will find themselves in exactly the same position with no concessions whatsoever, as large, formalised employers with employment departments, human resource management departments, personnel departments, and so on.

I do not insist on the wording. However, I beg the Government to pay some attention to the needs of small employers and specific forms of short-term, part-time employment. I beg to move.

Earl Russell: One other point which I think needs making is well within the terms of the amendment. It is the difficulty some people experience, when they have not previously been employed, in obtaining national insurance numbers. There are many cases of the Benefits Agency saying, "Come back when you have a job". I appreciate that the noble Baroness is in no position to answer immediately and without warning for the Department of Social Security. However, if the clause is to go through, before we are through the Report stage we need a fairly tightly worded assurance from the Department of Social Security that it will do something about the situation, especially for school-leavers who have never had previous work experience. If the school-leavers can get the national insurance number before they have done any work, it will assist matters.

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In passing, perhaps I may say that the department is unjustly maligned as to the alleged 20,000 national insurance numbers floating loose. I have read its replies to the Select Committee and I find them convincing. Many of the cases relate to people who are dead but whose dependants still receive pensions based on their contributions or to people who have been abroad, as I have, and might need the number again when they come back. I was grateful that mine had not been destroyed. If the point is raised later in the debate, as it may well be, I shall defend the department on it. But I should like to see it take action on people who cannot get a national insurance number until they have a job. Without that, the clause will be a misery for young school-leavers.

Baroness Blatch: I am not sure that the noble Earl's remarks relate specifically to this amendment. I understand from the way in which the noble Lord, Lord McIntosh, introduced the amendment that I should assume that it is taken separately from Amendment No. 85. If so, it would require that for the defence to be established under subsection (3), the employer would need to be able to show that he had taken all reasonable steps before the employment began to establish that the employment would not constitute an offence, as well as having seen and copied a relevant document. What constituted "all reasonable steps" would depend, under the terms of the amendment, on the nature of the employment or the employer.

I initially believed that Amendment No. 88 was intended to relate quite directly to Amendment No. 85 in an attempt to retain a requirement on employers to have considered the question of whether the employment of an individual would constitute an offence before the employment began. Either way, taken together those amendments would have meant that in order to establish a defence an employer would need to have been able to show that he had taken all reasonable steps before the employment began to establish that the employment would not constitute an offence. However, the employer would have two months, if we take this amendment with Amendment No. 85, from the commencement of the employment in order to obtain documentary evidence showing that the employment did not constitute an offence.

I should certainly be unhappy about the introduction of the concept of reasonableness into the defence we intend to provide under Clause 8. As the clause is drafted, an employer could be certain whether he had a defence. We think certainty is important to employers; they do not wish to leave it to subjective judgment on reasonableness. Under this proposal, the employer could need to enter into argument about whether actions taken before the employment began were reasonable in his circumstances. That would introduce an element of confusion and doubt.

A key point made by a number of respondents to our consultation document was the importance of it being clear to employers what they will need to do to establish

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a defence. The amendment would not enable us to provide employers with that clarity. I urge the Committee to reject the amendment.

Lord McIntosh of Haringey: The Minister's response was in large part based on her assumption that the amendment was intended to be linked with Amendment No. 85. That is not the case, and to that extent, therefore, her response is not relevant. As I admitted at the beginning she has a point. I do not think the wording is adequate to the purpose that we intend to achieve. In particular, looking again at the wording of the amendment, I see that we have linked (b) and (c) with "and". Clearly that would be inappropriate. It would have been our intention in ideal circumstances to have said "or". Then we should have had to go back and change the relationship between (a) and (b). So technically the amendment is defective.

However, I take note of the fact and place it on record that, even allowing for the inefficiencies of our amendments, the Minister has failed to pay attention to the needs of small businesses and short-term casual or part-time labour. Nothing in this clause allows that sort of flexibility, which is essential for employers who are not experienced in this kind of form filling.

I do not know whether the Minister has ever been in the position, as I have been, of establishing a company without an immediate intention of trading. Within a week or two, you receive from the Inland Revenue an enormous quantity of documentation--it can be 50 centimetres high--on the assumption that you will be employing people and will be involved in the PAYE system. That kind of thing, together with VAT returns, is the most abominable burden in the eyes of small employers.

What is proposed here is an additional burden for small employers. There is no "tempering the wind to the shorn lamb". There is no provision for those who might be encouraged to provide employment on a short-term basis or a casual basis. They know now that there are to be no special concessions.

I made no strong claim for the wording of my amendments and the Minister knows that. But she, in turn, has made no concessions whatsoever to the needs of small employers. That will be noted. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.30 p.m.

Viscount Addison moved Amendment No. 89:

Page 6, line 22, at end insert ("; or
(c) the employment was of such a casual and short-term nature, and the number of employees was such that it was not reasonably practicable for the employer to obtain such a document from the employee.").

The noble Viscount said: This amendment is concerned with a serious practical problem of compliance with the duties envisaged by the Government under Clause 8 that will be faced by employers of short-term casual workers in the agricultural and horticultural industries. Rather than

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declaring an interest, perhaps I should say that I have had some 25 years' experience of farming in Lincolnshire.

Employers commit an offence if they employ illegal immigrants. But in many parts of the countryside, such as East Anglia and Kent, where the crops grown require the employment of significant numbers of casual labour to harvest them, employers will be faced with a major practical difficulty.

Casual workers are engaged by the hour or day, and can come and go as they wish. They are paid at the end of each day or at the time they decide to leave work. Typically, these workers either make their own travel arrangements or a vehicle is dispatched to the nearest town: the workers are picked up, transported to the field, pick the crop and are paid in cash. When they arrive at work they will be under the supervision of a chargehand who may himself be employed only on a temporary basis.

Most casual workers do not carry documentation with them, and do not know their NI number. In many cases, the work is out in the fields, many miles from the farm or the farm office. So the photocopying of any documents they do have is out of the question.

There is often a questionmark, too, in relation to who is the employer. In many cases the workers will not be recruited by the farmer but by a gangmaster who also transports them to and from work. Sometimes a farmer pays the gangmaster; others may pay the workers directly. In some cases, depending on the nature of the work, the status of the worker is also questionable. Some could be held to be self-employed. The numbers of casuals involved in a single operation could run into hundreds each day.

In such circumstances other government departments--the DSS and the Inland Revenue--already accept that it is impossible for the employer to identify individual workers, and therefore special tax and national insurance arrangements apply to them.

Amendment No. 89 extends the defences available to an employer prosecuted under Clause 8. As an alternative to the employer showing that he had obtained the relevant document from the employee, he would be able to defend himself upon the basis that it was "not reasonably practicable" for him to obtain such documents from a large number of casual, short-term employees.

Coming, as the Minister does, from East Anglia, I am sure that she will have seen large gangs of casual employees at work harvesting the crops, whether they be flowers, fruit or potatoes, and will therefore understand the case I have made. I hope that she will give it her sympathetic attention. I beg to move.

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